By Gonzalo Vina – Jul 31, 2011 7:01 PM ET
Treasury Minister Mark Hoban said the U.K. will bring forward the implementation of European rules making it easier for small companies to raise money in equity markets, the latest bid to spur growth as the economy stagnates.
The steps from the European Union Prospectus Directive take effect in Britain today, a year early, Hoban said in a statement released by his office in London. Small companies will be able to raise 5 million euros ($7.1 million) without having to produce a prospectus for investors.
“Small businesses have to be able to access the finance they need — that includes making it easier for such businesses to tap into capital markets,” Hoban said.
Chancellor of the Exchequer George Osborne is looking at ways to improve conditions for companies so that they can expand more easily even as he attracts criticism from the opposition Labour Party for doing nothing to stimulate demand. The economy expanded 0.2 percent in the three months through June, leaving gross domestic product barely higher than it was in the third quarter of last year.
The measures, which double the level above which companies need to produce a prospectus, will save small and medium-sized businesses in the U.K. about 12 million pounds ($19.5 million) a year, the Treasury said. Companies will be able to raise money from as many as 150 investors, up from 100 under previous rules.
“More small firms should look at equity finance as an alternative route to accessing credit, and these simple changes will help firms who are looking to grow and invest,” John Walker, the national chairman of the Federation of Small Businesses, said in the statement.
To contact the reporter on this story: Gonzalo Vina in London at gvina@bloomberg.net
To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net
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